The Kenyan banking sector has in the recent past come under heightened scrutiny by stakeholders after some banks plunged into financial crisis and were consequently placed under receivership.
The closure of three Kenyan banks - Dubai, Imperial and Chase Bank - left many depositors uncertain of the stability of some of the lenders in the industry.
Kenyans.co.ke now takes you through the banks to safely deposit money without worrying that you’d one day wake up to shocking news that you cannot access your endeared cash until further notice.
The Central Bank categorises banks into three – Tier 1, Tier 2 and Tier 3 banks.
TIER 1 comprises of the big old banks, those that have been in the market for a long time, accumulating assets worth hundreds of billions of shillings and millions of clients, therefore, their possibility of falling into a financial crisis would be near impossible.
In Kenya, there are 6 banks in this category; Co-operative Bank of Kenya, Equity Bank, Kenya Commercial Bank (KCB), Barclays Bank, Standard Chartered and Commercial Bank of Africa (CBA).
For Instance: the Co-operative Bank (Co-op), which the London Financial Times named Bank of the Year, has assets valued at approximately Sh309 Billion and enjoys a customer base of over 3.4 Million depositors.
The bank is interconnected that its failure would be disastrous to the greater economic system, therefore, in case of a crisis, rest assured the government would save the situation.
The tier 1 category of banks have been billed as ‘too big to fail’, and there is no doubt they are the safest to bank with.
TIER 2 lenders are medium-sized banks. In the country, there are about 16 banks in this group and jointly command 41.7 percent of the financial market compared to their rivals in Tier 1, that collectively control 49.9%.
Some of the banks in this category include: CFC Stanbic, NIC, Diamond Trust Bank, I&M, Chase Bank, Bank of Africa, Family Bank, Ecobank and Housing Finance.
TIER 3 is made up of 21 small banks that control 8.4% of the market.
They include: ABC, Guardian, Credit Bank, Jamii Bora, Paramount Universal, Fidelity, Charterhouse, Consolidated and Development bank.
Here is a video showing the various banks in Kenya:
Below is an infographic illustrating the same.